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WGU Global-Economics-for-Managers Exam Syllabus Topics:

Section	Weight	Objectives
Foundations of Global Economics	20%	- Views on Globalization 1. Drivers and consequences of globalization 2. New view, Evolutionary view, Pendulum view - Economic Systems and Institutions 1. Market, command, and mixed economies 2. Political, legal, and cultural frameworks
Macroeconomics for Managers	10%	- Economic Indicators and Policies 1. GDP, inflation, unemployment, business cycles 2. Fiscal and monetary policy impacts
International Trade Theory and Policy	25%	- Classical and Modern Trade Theories 1. Absolute advantage, Comparative advantage 2. Heckscher-Ohlin, Product life-cycle, Strategic trade theory - Trade Policies and Barriers 1. Tariffs, quotas, subsidies, embargoes 2. Economic integration: EU, USMCA, ASEAN
Foreign Direct Investment and Global Strategy	20%	- Foreign Direct Investment (FDI) 1. Location advantages and entry modes 2. Theories of FDI, costs and benefits - Global Business Strategy 1. Strategic positions: Defender, Extender, Contender, Dodger 2. Porter's Diamond model
Global Finance and Monetary Systems	25%	- Balance of Payments and International Monetary System 1. Current account, capital account, official reserves 2. Fixed vs floating exchange rates, IMF, World Bank - Foreign Exchange Markets 1. Exchange rate determination, currency regimes 2. Hedging and risk management

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q76-Q81):

NEW QUESTION # 76
If the demand for a good is elastic, what is true?

A. Price and total revenue move in the same direction.
B. Total revenue increases with a change in price in either direction.
C. The quantity demanded responds only slightly to changes in the price.
D. The quantity demanded responds substantially to changes in the price.

Answer: D

Explanation:
InGlobal Economics for Managers, demand is said to beelasticwhen thequantity demanded responds substantially to changes in price, making option A correct. Elastic demand occurs when consumers are highly sensitive to price changes, often because close substitutes are available or the good represents a significant portion of income.
When demand is elastic, a small percentage change in price leads to a larger percentage change in quantity demanded. This relationship has important implications for pricing and revenue decisions. In such cases, price and total revenue move inopposite directions-a price decrease increases total revenue, while a price increase reduces total revenue.
Option B is incorrect because total revenue does not increase with price changes in both directions. Option C is false because price and total revenue move in opposite directions under elastic demand. Option D describes inelastic demand, where quantity responds only slightly to price changes.
Managers must understand elasticity when setting prices, forecasting revenue, and designing marketing strategies. Therefore, option A accurately defines elastic demand.

NEW QUESTION # 77
What are key features of an oligopoly? (Choose THREE.)

A. The actions of any one seller have little impact on others' profits.
B. Firms in an oligopoly are interdependent in ways competitive firms are not.
C. The actions of any one seller can have a large impact on the profits of other sellers.
D. There are a few sellers.
E. There is little motivation for cooperation between firms.
F. Firms are independent of one another, like competitive firms.

Answer: B,C,D

Explanation:
InGlobal Economics for Managers, oligopolies are defined bya small number of sellers,interdependence, andstrategic interaction, making options A, B, and C correct.
Option C is foundational: oligopolies consist ofonly a few dominant firms, unlike perfect or monopolistic competition. Because of this concentration, firms cannot ignore competitors' actions.
Option B highlightsinterdependence, a defining feature of oligopolies. Firms must consider how rivals will respond to pricing, output, or strategic changes. This leads to behavior such as price leadership, tacit collusion, or strategic rivalry.
Option A follows directly from interdependence. When one firm changes price or output, it can significantly affect market conditions and the profits of competing firms.
Options D and E incorrectly describe competitive markets, where firms are price takers. Option F is incorrect because oligopolies often have strong incentives to cooperate, either explicitly or tacitly, to maintain profitability.
Thus, A, B, and C accurately capture the essential characteristics of an oligopoly.

NEW QUESTION # 78
In which situation is the contender strategy appropriate for responding to multinational enterprises (MNEs)?

A. There is low industry pressure to globalize, and competitive assets are customized to home markets.
B. There is high industry pressure to globalize, and competitive assets are transferable abroad.
C. There is high industry pressure to globalize, and competitive assets are customized to home markets.
D. There is low industry pressure to globalize, and competitive assets are transferable abroad.

Answer: C

Explanation:
InGlobal Economics for Managers, thecontender strategyis appropriate whenindustry pressure to globalize is high, but competitive assets are customized to home markets, making option B correct. This strategy is typically adopted by domestic firms facing strong competition from multinational enterprises (MNEs) in industries that are becoming increasingly global.
High pressure to globalize means that firms must compete on an international scale, often due to global customers, standardized products, or strong foreign competitors. However, when a firm's competitive assets- such as brand reputation, customer relationships, distribution networks, or regulatory knowledge-are deeply rooted in the home market, they are not easily transferable abroad. In this situation, the firm cannot immediately expand internationally without losing its competitive advantage.
Under a contender strategy, firms focus ondefending and strengthening their domestic positionwhile gradually upgrading capabilities to prepare for future global competition. This may involve improving efficiency, investing in technology, forming selective alliances, or learning from foreign competitors operating in the home market.
Option A describes conditions suitable for anextender strategy, where firms can leverage transferable assets internationally. Options C and D reflect low pressure to globalize and are more consistent with defender or dodger strategies rather than contender behavior.
Therefore, option B best captures the conditions under which the contender strategy is applied in response to MNE competition.

NEW QUESTION # 79
What is purchasing power parity (PPP)?

A. The idea that a country's exchange rate is an indicator of socioeconomic well-being
B. The movement of investors in the same direction at the same time
C. The gain from taking advantage of inefficient exchange rates
D. A theory suggesting that the price for identical products sold in different countries must be the same in the absence of trade barriers

Answer: D

Explanation:
InGlobal Economics for Managers,purchasing power parity (PPP)is defined asa theory suggesting that the price for identical products sold in different countries must be the same in the absence of trade barriers, making option A correct. PPP is a fundamental concept in international economics used to analyze exchange rates and compare price levels across countries.
The core idea behind PPP is thelaw of one price, which states that identical goods should sell for the same price when prices are expressed in a common currency, assuming no transportation costs, tariffs, or market frictions. If prices differ, arbitrage opportunities arise, leading market forces to adjust prices or exchange rates until parity is restored.
Option B refers to speculative gains from exchange rate inefficiencies, not PPP. Option C describesherd behaviorin financial markets. Option D incorrectly links exchange rates directly to socioeconomic well- being, which is not the theoretical basis of PPP.
Global Economics for Managersdistinguishes betweenabsolute PPP, which compares price levels directly, andrelative PPP, which focuses on changes in inflation rates and predicts how exchange rates should adjust over time. While PPP may not hold perfectly in the short run due to trade barriers and non-traded goods, it remains a valuable long-run benchmark for evaluating currency misalignment.
For managers, PPP is useful when assessing international cost competitiveness, long-term exchange rate trends, and global pricing strategies. Thus, option A accurately captures the definition and purpose of purchasing power parity.

NEW QUESTION # 80
Which situation illustrates the proposition that when formal constraints are unclear or fail, informal constraints play a larger role in reducing uncertainty and providing constancy to firms?

A. Firms relocating overseas due to a new domestic tax policy
B. Firms entering gray markets due to high taxes
C. Choosing a headquarters location based on cost of living, airports, and tax credits
D. A firm follows strict environmental practices despite lax local laws

Answer: D

Explanation:
InGlobal Economics for Managers, one core proposition of the institution-based view is thatwhen formal constraints are weak or unclear, informal constraints become more influential, making option D the correct illustration.
In option D, although local laws allow firms to bypass certain environmental safety standards, company leaders choose not to do so because ofdeep ethical values and social responsibility norms. These informal constraints-values, moral commitments, and corporate culture-guide behavior in the absence of strong formal enforcement.
Option A reflects rational economic decision making within clear formal rules. Option B illustrates response to formal policy change. Option C involves avoidance of formal rules rather than reliance on informal constraints.
Thus, option D best demonstrates how informal institutions substitute for weak formal institutions in guiding firm behavior.

NEW QUESTION # 81
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